San Francisco's downtown landscape could change as the Metreon, one of the city's largest malls, actively seeks a buyer. According to a brochure from JLL, the property at 135 Fourth St. is on the market, with the firm set as the exclusive adviser for the transaction. The Metreon, a 312,592-square-foot shopping center, neighbors the Yerba Buena Center and is currently 91.9% leased, primarily by Target and the AMC movie theater.
JLL Investor Center described the sale as "a generational opportunity to acquire an iconic urban retail asset with immediate and long term opportunities to add value and to shape the future of downtown San Francisco." Investors are particularly being courted with the potential to enhance the property's value through strategic actions such as developing the first-floor vacancies into new dining spots. Moreover, the Metreon boasts substantial advertising opportunities, especially during conferences at the adjacent Moscone Center, with wall signage space for large billboards.
Starwood Capital Group owns and manages the Metreon, acquiring it in a $1.1 billion deal in 2012. This complex, which sits on 2.7 acres of leasehold land controlled by San Francisco, comes with 58 years remaining on the lease, expiring in 2082, as per details from an online listing by JLL Investor Center. Notably, retail theft has been an issue for businesses within the mall, leading to security measures like locking away often stolen items. The Target store also started locking popular shoplifting items such as T-shirts, socks, and underwear in protective security cabinets.
Financial standing appears sturdy, with the Target store recently taking up a 10-year lease option through 2033. According to JLL, the food and beverage tenants at the Metreon are drawing impressive revenues averaging $1,442 per square foot, which presents a 23% growth year-over-year. Additionally, the AMC Theater, equipped with an Imax screen, is pulling in about $996,000 per screen, a figure that more than doubles the chain's average revenue per screen, about $478,000, as the San Francisco Business Times reported.
